Are Your Funds Safe? NFA to Shut down small forex fcms

[king]

Hi everyone and especially to you forex savior,

I was in the process of going to ask help in choosing a broker, then thought to read through the thread to see if my question hadn't been asked and answered prior to this time. alas, i 've had a eye full(?), just finished going through the entire thread.

Firstly, thank you to forex savior whatever anyone might think about your motive, i think it compels the prospective trader at least to become more aware by doing his own research. Now, this is my understanding about the issue of regulation of FDMs as it yet stands today, please, correct me if you believe i am wrong. NFA is at best a Self-Regulatory Organisation (more probably a designated self-regulatory organisation) for FCMs in the United States. CFTC functions are defined in their site as highlighted below:

About the CFTC
An Important Mission in the Ever-Changing World of Finance.

Congress created the Commodity Futures Trading Commission (CFTC) in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The agency's mandate has been renewed and expanded several times since then, most recently by the Commodity Futures Modernization Act of 2000.

In 1974 the majority of futures trading took place in the agricultural sector. The CFTC's history demonstrates, among other things, how the futures industry has become increasingly varied over time and today encompasses a vast array of highly complex financial futures contracts.

Today, the CFTC assures the economic utility of the futures markets by encouraging their competitiveness and efficiency, protecting market participants against fraud, manipulation, and abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.

The CFTC's mission is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.

In their site, FCMs are the closest type of businesses entities the CFTC has oversight functions for, FDMs does not seem to be included! Could this be because the fx trade is relatively in it's infancy? In performing their oversight function, CFTC indicates on their site for example that they require FCMs & IBs to be members of NFA. I couldn't find any mention of FDMs.

Question: If CFTC's remit include legally the regulation of FDMs, why would they foot-drag in ensuring complaince with registration/regulation by the designated bodies as NFA in this instance? Is it not more appropriate to ensure the proper operation of such firms to prevent the tales of woe as experienced by failed FDMs?

Forex Savior, refer to your thread #122 dated 17/9/2007 titiled FOREX DEALER DEAD POOL (version 4.0) where you indicated the following:
Unregulated Firms (Buyer Beware)
FXDD (?)
GCI (?)
WestCapFX (?)
ACM (?)
MIG (?)
DukasCopy (?)
GFX Group (Forex.CH) (?)
Crown Forex (?)
Krusty's Currency Trading (?)
Tradex Swiss AG (Shutdown!)
NorthFinance (?)

Ignore for the moment the SWISS FIRMS in the above, why/how could they operate at all without appropraiate registration/regulation if they ought to according to the law as it stands presently? I read the quote from an ealier thread of FXDD which i have also copied and pasted (highlighted below) from the FAQ section on their site.

Q: How is FXDD regulated?
A: FXDD began as a subsidiary of Tradition North America within the Tradition Group of companies. (www.tradtiongroup.com). FXDD’s management, operation, compliance, customer relations and its financial policies and procedures were structured to meet the Tradition Group’s oversight and those policies and procedures remain firmly in place. Our managers have deep experience in the foreign exchange markets and we conduct our business as highly qualified professionals. As yet, the OTC spot forex market in the United States is not subject to regulation by the SEC or the CFTC. FXDD is not a member of any private self regulatory organization such as the FINRA or the NFA and is not registered with either the CFTC or the SEC. Congress may, in the future, enact legislation requiring registration with a federal and/or private regulatory agency. As the regulatory environment for spot foreign exchange matures in the United States, FXDD will keep its options open and, if the regulatory environment becomes consistent and well defined, FXDD will register with the designated oversight agencies. Having said that, FXDD manages its business in conformity with well established dealing protocols and the customs and practices of the foreign exchange dealing community. FXDD has thousands of clients who have chosen us as their dealing firm because of the manner in which we conduct our business and because of our historic association with the Tradition Group. We maintain extensive dealing lines with the top global banks and have never had any issues relating to the protection of customer assets or the manner in which we handle our client accounts.

Note the underlined in the above(emphasis mine).

I like to state that I am NO advocate for non-regulation. Far from it, I believe firmly in regulation of entities otherwise societies would be reduced to jungle style existence. I just think it should be well defined/structured but do not think that the issue of registration/regulation of FDMs is so right now in the United States. I believe too, that this will change because the retail fx trade is set to grow, the awareness is only just begun.

As I indicated at the begining, my views are not set in concrete, I stand to continue to be educated.

Lastly, I want to say thank you to the providers of this forum, what I have learnt here in less than one year is more than what some get out of a college degree programme and to all the contributors, more grease to your elbow; eh, more pips to your accounts.

[forex savior]

Originally Posted by king

Hi everyone and especially to you forex savior,

I was in the process of going to ask help in choosing a broker, then thought to read through the thread to see if my question hadn't been asked and answered prior to this time. alas, i 've had a eye full(?), just finished going through the entire thread.

Firstly, thank you to forex savior whatever anyone might think about your motive, i think it compels the prospective trader at least to become more aware by doing his own research. Now, this is my understanding about the issue of regulation of FDMs as it yet stands today, please, correct me if you believe i am wrong. NFA is at best a Self-Regulatory Organisation (more probably a designated self-regulatory organisation) for FCMs in the United States. CFTC functions are defined in their site as highlighted below:

About the CFTC
An Important Mission in the Ever-Changing World of Finance.

Congress created the Commodity Futures Trading Commission (CFTC) in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The agency's mandate has been renewed and expanded several times since then, most recently by the Commodity Futures Modernization Act of 2000.

In 1974 the majority of futures trading took place in the agricultural sector. The CFTC's history demonstrates, among other things, how the futures industry has become increasingly varied over time and today encompasses a vast array of highly complex financial futures contracts.

Today, the CFTC assures the economic utility of the futures markets by encouraging their competitiveness and efficiency, protecting market participants against fraud, manipulation, and abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.

The CFTC's mission is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.

In their site, FCMs are the closest type of businesses entities the CFTC has oversight functions for, FDMs does not seem to be included! Could this be because the fx trade is relatively in it's infancy? In performing their oversight function, CFTC indicates on their site for example that they require FCMs & IBs to be members of NFA. I couldn't find any mention of FDMs.

Question: If CFTC's remit include legally the regulation of FDMs, why would they foot-drag in ensuring complaince with registration/regulation by the designated bodies as NFA in this instance? Is it not more appropriate to ensure the proper operation of such firms to prevent the tales of woe as experienced by failed FDMs?

Forex Savior, refer to your thread #122 dated 17/9/2007 titiled FOREX DEALER DEAD POOL (version 4.0) where you indicated the following:
Unregulated Firms (Buyer Beware)
FXDD (?)
GCI (?)
WestCapFX (?)
ACM (?)
MIG (?)
DukasCopy (?)
GFX Group (Forex.CH) (?)
Crown Forex (?)
Krusty's Currency Trading (?)
Tradex Swiss AG (Shutdown!)
NorthFinance (?)

Ignore for the moment the SWISS FIRMS in the above, why/how could they operate at all without appropraiate registration/regulation if they ought to according to the law as it stands presently? I read the quote from an ealier thread of FXDD which i have also copied and pasted (highlighted below) from the FAQ section on their site.

Q: How is FXDD regulated?
A: FXDD began as a subsidiary of Tradition North America within the Tradition Group of companies. (www.tradtiongroup.com). FXDD’s management, operation, compliance, customer relations and its financial policies and procedures were structured to meet the Tradition Group’s oversight and those policies and procedures remain firmly in place. Our managers have deep experience in the foreign exchange markets and we conduct our business as highly qualified professionals. As yet, the OTC spot forex market in the United States is not subject to regulation by the SEC or the CFTC. FXDD is not a member of any private self regulatory organization such as the FINRA or the NFA and is not registered with either the CFTC or the SEC. Congress may, in the future, enact legislation requiring registration with a federal and/or private regulatory agency. As the regulatory environment for spot foreign exchange matures in the United States, FXDD will keep its options open and, if the regulatory environment becomes consistent and well defined, FXDD will register with the designated oversight agencies. Having said that, FXDD manages its business in conformity with well established dealing protocols and the customs and practices of the foreign exchange dealing community. FXDD has thousands of clients who have chosen us as their dealing firm because of the manner in which we conduct our business and because of our historic association with the Tradition Group. We maintain extensive dealing lines with the top global banks and have never had any issues relating to the protection of customer assets or the manner in which we handle our client accounts.

Note the underlined in the above(emphasis mine).

I like to state that I am NO advocate for non-regulation. Far from it, I believe firmly in regulation of entities otherwise societies would be reduced to jungle style existence. I just think it should be well defined/structured but do not think that the issue of registration/regulation of FDMs is so right now in the United States. I believe too, that this will change because the retail fx trade is set to grow, the awareness is only just begun.

As I indicated at the begining, my views are not set in concrete, I stand to continue to be educated.

Lastly, I want to say thank you to the providers of this forum, what I have learnt here in less than one year is more than what some get out of a college degree programme and to all the contributors, more grease to your elbow; eh, more pips to your accounts.

Great post King. In regards to FXDD. The CFTC is claiming jursidiction over retail FX. However, the CFTC lost a court case against a forex broker who claimed the CFTC didn't have any legal claim to regulate forex trading. It appears FXDD is using that case as their basis for claiming they don't need to be registered with the CFTC. However, they are the only firm I know of in the U.S. claiming this. It is a gutsy and very risky decision by FXDD. FXDD is really out on a limb here and customers should be very wary of them.

[forex savior]

As I have illustrated on this thread there is no shortage of colorful con artists in the forex business. Yet there is one criminal mastermind in particular who always seems to skate away from his on ice thuggery with more dexterity than one of the Hanson Brothers. His name is Robert Gray. And when he wields the high stick more than just a few teeth go flying into the blood splattered night...

So who is this guy? How has he been able to cut such a swath through the forex industry for all these years? And how was he able to con, not just ordinary traders, but top U.S. Regulatory Agencies themselves? Well, he was able to do it using that old American adage that "Practice makes Perfect."

The Rob Gray story starts back in the go go 80's on that notorious stretch of highway running from Boca Raton to Miami known to the Feds as "Maggot Mile." It was December 11, 1986, when our goodfella to be got started in the futures industry by applying to be an associate member of the NFA with the firm Multivest Options Inc and International Precious Metals Corp Inc in Fort Lauderdale.
BASIC Details

But Gray's career with these two firms would be short lived and by the summer of 1987 he was no longer licensed by the NFA and had apparently left these brokerages. Multivest itself would eventually be closed down for gross fraud within a few years.

Let's role the tape and see how Gray got his start as a forex huckster:

Multivest Options Inc was one of the many futures industry orifices oozing with criminality during the decade of greed. The firm all by itself had over 120 Reparations Cases with the CFTC.
BASIC Details

In 1988 the NFA settled a case with Multivest in which numerous salesmen were cited for fraud and high pressure sales tactics.
BASIC Case Summary

And then in 1990 the CFTC shut them down for good stating:
BASIC Case Summary

"from June 1987 through October 1989, MultiVest, while soliciting almost 15,000 customers to invest in commodity options, misrepresented the likelihood of profit in trading commodity options, MultiVest's success rate, the risks in trading commodity options, the expertise and experience of MultiVest's sales people, and the extent and quality of MultiVest's market research. MultiVest was also charged with failing to supervise the handling of commodity options accounts by its salespeople."

So this is the firm that gave birth to Robert Gray, a fraudulent futures firm that sold bogus options to the gullible Senior Citizens of Seizure World, USA.

The trail goes cold in the 1990's although rumor has it he gravitated over to the stock market (I can't imagine Gray missed out on the greatest con off them all, the Internet Stock Bubble...) But his grand debut in the forex world appears to be in 2000 at FXCM of all places. According to a hilarious story I picked up at the New York Traders Expo a couple months ago Gray was the head of sales at FXCM and in a feat of treachery worthy of an Italian Opera he bolted the company with all FXCM's clients on a floppy disk and went to work at FX Solutions! Well done Rob, Lord Vader from MultiVest trained you well...

But it appears FX Solutions was not all the grateful as he lasted all of three months in their employ according to the NFA's Registration Records.
BASIC Details

Where to next for this Son of the Sith? Well, how about Director of Global Forex Operations for GFS Forex & Futures. Good Lord, how on earth did Robert Gray land this gig? Doesn't ANYONE do background checks anymore? Apparently not. Check out this article from 2003 which discusses the growing popularity of mini trading in FX:
The road to mini-success. (Online Trading). | Software Services & Applications (301) from AllBusiness.com

GFS Securities & Futures got on board a few months ago in March. "It was very much a client-driven decision," says Robert Gray, director of global forex operations for GFS. "The regulatory environment that the markets exist in now is really fueling forex in general."

Ok for Robert Gray of all people to speak glowingly about the "regulatory environment" for forex is to redefine the meaning of "Chutzpah." Call it "Grayzpah." And how about this for Grayzpah. In this lawsuit filed by the State of Colorado in 2004 Robert Gray is listed as a "Compliance Officer" with GFS. What on earth does Robert Gray know about compliance?That's the equivalent of having Michael Jackson as your babysitter.
http://www.dora.state.co.us/securiti...int%20rpt.pdf.

Another interesting note from this lawsuit is the admission that GFS cleared all its trades through Interbank FX. Which brings us to Part II of Dirty Rotten Scoundrel, stay tuned...

[king]

Thanks for your reply Forex Savior.
That CFTC lost that case goes to show somehow the indefinitiveness of forex trade regulation presently. I am willing to go long on a security (2 standard lots) that the whole arena of forex trade regulation will become more definitive in a little while. I think of the beauty of this kind of forum, one is the awareness that it provides, at least in the interim, people become more careful. The Robert Gray issue should make an interesting topic for students of psychology with particular emphasis on trait theory seriously, imagine what it would be like if there were never any form of checks/regulation in the system, innocent people would be eaten alive.

keep up the good work.

[forex savior]

Originally Posted by king

Thanks for your reply Forex Savior.
That CFTC lost that case goes to show somehow the indefinitiveness of forex trade regulation presently. I am willing to go long on a security (2 standard lots) that the whole arena of forex trade regulation will become more definitive in a little while. I think of the beauty of this kind of forum, one is the awareness that it provides, at least in the interim, people become more careful. The Robert Gray issue should make an interesting topic for students of psychology with particular emphasis on trait theory seriously, imagine what it would be like if there were never any form of checks/regulation in the system, innocent people would be eaten alive.

keep up the good work.

You make a good point about the state of forex regulation in the U.S. It is in need of clafification, something that should be clarified with the new law set to pass in Congress.

[forex savior]

When last we left off Robert Gray was busy handing over the financial records of a shady managed funds firm operating under his nose at GFS to government prosecutors. As the court document described GFS was clearing its trades through Interbank FX.

The marriage between Gray and IBFX then became fully consummated in 2005. In March of that year according to the NFA Gray applied to be a Principal with Interbank FX. No telling if he ran over to IBFX with all GFS' clients but in any case he appears to have officially stayed at IBFX for about six months.

Unofficially? This is where things get very murky. Gray withdrew his license with IBFX on October 1, 2005 and applied for a new one with a newly created FCM, Forex Liquidity, on October 28, 2005. It was at FXLQ where Gray would cook up his piece de resistance, concocting an imaginary $35 million bond out of thin air and using that to pad FXLQ's official adjusted net capital number.

I won't rehash the collapse of FXLQ again but if you would like a full recap feel free to go here:
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

While Gray officially cut his ties to IBFX in 2005 there was still a business relationship between the two as evidenced by the fact that FXLQ was a prime provider of liquidity to IBFX. A debate has risen on the bulletin boards as to how dependent IBFX was on FXLQ in providing it with liquidity. In particular one dubious poster on FX Street claims IBFX for a long time was merely a white label of FXLQ and was somehow bound to Robert Gray for life:
Forex Street Weblog: InterbankFX related to FXLQ?.... I do not think so

From: Dan Campbell, Pipland, USA
Date of Post: 2007-12-05

Review: I've been trying to warn folks for over 2 years now (read my threads below, I used to work there), but justice is finally being servered, "to some degree". Forex Liquidity (FXLQ) is finally under investigation from the NFA. To recap: InterbankFX (IBFX) is a white label of FXLQ. Hense they are able to say "no dealing desk". Because in fact "IBFX" does not have a dealing, but rather it's at FXLQ where all IBFX customers clear their trades...

Sadly, as with most NFA "investigations", nothing will be done, but this should be a hugh warning bell for everyone using IBFX. Following the bread crumbs folks...

BASIC Details
BASIC Case Summary
To our Valued Clients:

The white label charge comes off as a bit of conspiracy mongering on the part of this Dan Campbell as IBFX continues to operate for the most part without incident even as FXLQ has been shut down. But it does beg the question how on earth did Robert Gray accrue so much influence in this industry?

Gray has been linked to numerous firms from FXDD, to Spencer Financial to Velocity FX. Google him and his name appears all over the bulletin boards like a plague bacillus. Forums - Any Recommendation for MT4 based Fx Broker
http://forexbastards.com/forum/inde...96&min=0&num=15
MoneyTec Traders Community Forum

So deep is his influence that he even pops up in China heading up another fx brokerage called MultiBank FX (great mugshot of Gary on page 7):
http://www.fxmultibank.com/pdf/brochure.pdf

And while IBFX may still be up and running their relationship with Robert Gray has cost them dearly as FXLQ owes Interbank over $10 million in frozen assets according to FXLQ's own Receiver:
http://www.robbevans.com/pdf/forexlqreport01.pdf

It's my hope that the new NFA Capital Requirement increase to $5 million will help weed out the Robert Grays of the FX World. Gray flourished in the weeds of the industry at small firms that never seemed to get the NFA's attention. But with the industry reduced to 24 domestic firms and with new rules set to require all Introducing Brokers be licensed his time will have come and gone and none too soon.

I read at one of these links that Robert Gray has an Irish passport and that if things ever get too rough he can always hop on Aer Lingus and live out his days shepherding sheep on a quiet farm outside Galway. Well, should that day come I'm sure the forex trading community will sing in unison:

Oh Robbie Boy, the pipes, the pipes are calling
From glen to glen, and down the mountainside.
The summer's gone, and all the flowers are dying.
'Tis you, 'tis you must go and we gladly say goodbye.

But come ye not back when summer's in the meadow
Or when the valley's hushed and white with snow,
'Tis we'll dread you be there in sunshine or in shadow.
Oh Robbie Boy, Oh Robbie Boy, we loathe you so...

[forex savior]

There is a great deal of uncertainty in the Swiss Forex Dealer community right now. There is no way of knowing which firms are here to stay and which firms are collecting coins in preparation for their crossing of the river Styx. I have emailed all the major Swiss firms to try and find out if each firm plans on getting a banking license. The responses (or lack thereof) have been quite illuminating.

As such I'm starting a Swiss Dealer Dead Pool to keep the trading public updated and informed about what is going on in Switzerland.

Firms that claim they are applying for a banking license
1) ACM
2) Fibo Group
3) Crown Forex
4) DukasCopy
5) MIGfx

Firms that are fleeing Swiss Regulation
1) Masterforex. Their business office is listed in Switzerland but they are registered in the Seychelles and have stated they do not need to get a banking license.
2) forex-swiss. FXCH, despite the fact they are NAMED "Forex Swiss" claim registration in Dominica. This is an odd company that has claimed multiple office addresses over the years including, Switzerland, Austria, South Africa, Iran, and the United States. Today they are claiming they have offices in Dominica and the United Kingdom. Tomorrow who knows, they could claim a mailing address in Tibet. Beware this firm.
3) Prime4X. Their head office is in Switzerland but they have stated they are applying for a license in Cyprus.

Firms that are no longer accepting customers or have been shutdown
1) WestCapFX
2) Tradex Swiss AG
3) Finex
4) Aleccohfx

Firms that refuse to comment
1) GFX Group (Forex.CH)
2) Swiss Direkt
3) Tadawulfx
4) Advised Trading

As always conduct your due diligence and make sure the firm you trade with is regulated and legit.

[forex savior]

After getting a series of tips from disgruntled traders I'm going to follow up on a couple unregulated forex brokers next week dabbling in the treacherous MT4 arena. Masterforex, PoltekFX and FX Open are involved in a brutal slugfest that has spilled over into numerous bulletin boards. Who are these firms and what are they up to? Details to follow next week.

[forex savior]

What happens when a business deal goes bad? You get bitterness, recriminations, machinations and vows to get even. This appears to be what happened after Poltek FX and FX Open parted company. It was not an amicable divorce and after reading through dozens of threads it appears the two former spouses are still hurling dishes, pots and pans, as well as the kitchen sink and family cat at one another in a fit of rage that even Hillary and Obama can’t match.
Poltekfx - Forex Trading

In this saga there are no good guys or bad guys. All the Savior can do is warn people to stay on the sidelines and watch the spectacle from afar, well out of harm’s way. But if you are looking for a scorecard, well, you’ve come to the right place. Let’s pick things up from one of the earliest threads on the subject.

“FX Open Scam Scum.” This is the title of a series of truly head spinning threads over at Forex Factory detailing the misadventures of FX Open, a forex dealer with one of the worst reputations in the business.

FXOPEN SCAM SCUM
Fxopen Is a SCAM, Be Aware!
FXOpen Scam Alert again...
Fxopen Are Scammer ................................... ..

Now if you ask FX Open they blame their poor reputation on the scoundrels at Poltek FX who they claim have been waging a systematic propaganda campaign designed to discredit their firm.
FXOpen forex broker - forex services - forex trading

But who is FX Open? Well, nobody really knows. There is no business address listed on their website. There is no Board of Directors or head shots of executive officers. If you really press them they’ll give you an address in Egypt or tell you that they are registered in the Seychelles. And if that isn’t confusing enough one muckraking trader found out that their website is registered in Florida to a “Mr. John Fool.”
Forex Factory - View Single Post - Fxopen Is a SCAM, Be Aware!

So they could be anywhere and everywhere. They could be someone or no one. In short, they can up and vanish like a fart in the wind if they have to.

FX Open is also one of the too numerous to count unregulated MT4 brokers preying upon the desperation of those traders who have fallen in love with MetaQuotes’ software. And like so many of these unregulated forex brokers they are in the habit of misleading the public about their unregulated status. When a customer asked them if they were regulated this was their response:
Forex Trading - View Single Post - FxOpen

FXOpen is offshore broker and FXOpen's business activity is regulated by SIBA.
FXOpen - Certificate of Incorporation

Now let’s go to the SIBA website and find out just what this means. The following are the key features of the law that supposedly “regulates” FX Open:
HOME OF INTERNATIONAL BUSINESS OPPORTUNITIES

• No requirement to disclose the beneficial owners of an IBC
• No minimum capital stipulation
• No need to file accounts with the Registrar

In short, FX Open’s “regulation” consists of a useless piece of paper that probably cost them a $100 in filing fees. They are no more regulated than is some ten year old kid’s lemonade stand.

That alone should convince traders to STAY AWAY from them. But the truth is that’s just the tip of the iceberg with these guys.

FX Open has made a lot of enemies in their brief history. One of them is a Kazakhstan native who goes by the name of Erlan. Erlan was a former customer of FX Open’s and he setup a website completely devoted to getting back $50,000 that he claims FX Open stole from him: FXOpen.com is a scam company! Beware!

FX Open then responded to Erlan with a website of their own (FXOpen public letter) telling a wild story that included accusations that Erlan was sending all of FX Open’s customers “penis enlargement” emails, was trying to crash FX Open’s server and hack FX Open’s customer files and was actually the customer of a former business partner of FX Open’s (Poltek FX) based in Russia that was using Erlan to get back at FX Open. (More on Erlan and his shenanigans in Part II of Metatrader Misery.)
Forex Factory - View Single Post - Fxopen Is a SCAM, Be Aware!

Now seriously, who in their right mind is going to open an account with FX Open after hearing such a loopy tale? And it gets even zanier. Someone claiming to be FX Open’s CEO starts posting at Forex Factory demanding that the forum moderator stop banning supporters of FX Open or else they’ll sue Forex Factory.
Forex Factory - View Single Post - Fxopen Is a SCAM, Be Aware!

The moderator replies that FX Open is a scam and the man claiming to be FX Open’s CEO quickly slinks out the back door after he sees his threats are being ignored. Indeed, FX Open gets completely banned from the forum and is forced to waddle over to Forex TSD where they cause another huge fight with traders screaming that FX Open is a scam and should be banned.

Is FX Open a scam? It’s just not clear. FX Open’s lack of transparency is deeply troubling. Their communication with the public is so unprofessional and their English so mangled that one gets the impression that Borat is running the company. They are also as I have stated before unregulated so if they ever get into trouble they are accountable to no one. At the end of the day this is what the trading public should be most concerned about.

The public should also be concerned about the firm’s alleged dealing practices. The number one complaint against FX Open is that they are a ruthless market maker that has no patience for customers who actually make money. Now this is a common complaint against many market makers. But in the threads referenced above I’ve never seen so many traders screaming about a firm’s dealing practices. Trader after trader complains about profits being removed from their accounts. Numerous traders complain of how the firm booted them out only after they made profits. Traders complain about terrible execution in numbers that really call into question the dealing ethics of this firm.

FX Open’s reply is that all these complaining customers are using some kind of secret software that allows them to “cheat” and make big profits off them. Thus they have no choice but to close the accounts of these cheating customers. I’m aware that there are some traders out there who are skilled at jumping in and out of the market in short bursts due to price discrepancies and latency issues. But this is very difficult to do. Yet judging from FX Open’s claims you would think that there are hordes of these traders out there raping and pillaging poor little forex dealers like FX Open.

Having said all that are some of these complaints against FX Open being orchestrated by their enemies? It appears so. And in part II of Metatrader Misery we’ll take a look at FX Open’s rival “Poltek FX” to uncover what these guys are up to.

[forex savior]

Is Erlan Saduakasov a real person? Well, judging from this You Tube video he is.
YouTube - Erlan Saduakasov speaking himself

Erlan has been waging a non-stop crusade against FX Open for several months now. He appears on bulletin boards, has his own website (FXOpen.com is a scam company! Beware!) and appears to be quite convincing. Did Erlan lose money at FX Open? Probably. Is Erlan working for or working with FX Open’s hated rival Poltek FX? It sure looks that way.

The evidence is a thread at ForexTSD in which Erlan’s IP address gets traced back to one of Poltek FX’s offices in St. Petersburg, Russia.
Brokers Scam - Page 5 - Forex Trading

The office Erlan was traced back to was FXIndia.org, which is one of the many front groups Poltek uses to recruit customers. Other ones include “Master Forex” (yup, that’s the Swiss outfit that said it doesn’t need to get a banking license and you’ll know why in a moment), Beaverhead Financial, Iberia Forex, and others.

Poltek’s official business address is listed in Belize and like FX Open they too have a useless fill in the blank “certificate” which can be flashed in the faces of naïve traders whenever pesky questions about “regulation” come up:
http://www.poltekfx.com/pic/sertificat.jpg

Another note about Poltek’s address is that their other company, MasterForex, claims an address in Switzerland. Yet it appears this address is fictitious. When a poster at a bulletin board stated they couldn’t actually find Masterforex’s office and asked them if this office even existed a Masterforex’s spokesman refused to provide any additional information and just stated “we also have an office in Russia where you can meet us.” You’d have to be a pretty brave person to want to visit this Russian office knowing the Swiss office actually listed on their website is bogus.
http://carigold.com/portal/forums/sh...=26720&page=12

As for Master Forex’s regulatory status, you guessed it; Master Forex has its own certificate from the Seychelles it likes to use to ward off those evil regulatory spirits: http://www.masterforex.org/upload/image/fullsize/13.jpg

Why so many different registrations and addresses? Well I guess it never hurts to have a second getaway vehicle in case the first one breaks down. And just as with FX Open you won’t find the actual names of any CEO’s or executive officers on any of these websites. Just addresses for P.O. boxes or links to instant messenger addresses. I’m stunned that anyone would actually consider sending their money to such financial phantoms who can conjure themselves up on a moment’s notice and then disappear without leaving a trace.

Of course, Poltek knows their lack of credibility is a problem which is why they dangle all sorts of goodies before the trading public’s eyes in an attempt to make sure traders don’t look behind the curtain. They offer pip rebates, insane 500:1 leverage, trading volume bonuses, deposit bonuses and even have a special bonus for traders who drive up traffic on their forums by posting sycophantic rubbish.
Poltek FX - Bonus Money

So even though Poltek has no credibility they are able to woo newbies who are looking for a bargain. But the competition for these newbies is fierce which is why Poltek and FX Open are at each other’s throats.

This Russian version of the Hatfields and the McCoys is likely to continue well into the future with both screeching at each other in the comical form of broken English as seen below in this Poltek broadside against FX Open:
Forex Trading - View Single Post - Poltekfx

One of these days we have released a newsletter to all our customers, stating that Poltek Fx. starts operating since the 10th of January. Right after that FxOpen Scam Company has published a piece of news about the so-called "phishing emails". You can read it here (FXOpen forex broker - forex services - forex trading).

We are more than suprised with such reaction and would like to state the following:

When you opened your accounts, you did it at Poltek Company, because at that time Poltek used to cooperate with FxOpen. FxOpen is operated by two persons, has no real office, or location and is well known over the web for scamming their customers. You can read about it at [url=http://fxopen.info]

This is the reasin why we don't work with them any more.

After that the head of FxOpen has stolen the whole customer database (including funds and orders) from Poltek and opened his own so-called "brokerage" Belveder. This case was reported to Metaquotes Inc, and their Metatader license is under question now.One case of deceptions (among great many of them) of clients is here: FXOpen.com is a scam company! Beware!
Fxopen itself try to hide these facts.

Besides, the PR director of FxOpen, seems to know English poorly (he is actually a young man from one of the former Soviet Republics), and doesn't know what a "phishing email" actually is. Let us forgive the under-educated boy, but in fact a phishing email always tries to receive some data from you. Logins, passwords, etc. WE ARE IN NO WAY TRY TO RECEIVE ANY INFORMATION FROM YOU. This newsletter is intented only to let our customers know that the company, where they have their trading accounts has started to operate again with even better level of services.

I love how Poltek, with its busted English and awful grammar, has the nerve to ridicule FX Open’s poor language skills. I don’t think that is the best strategery Poltek should be using against FX Open. In any case FX Open claims Poltek stole their clients and Poltek claims FX Open stole its clients… This tit for tat pretty much summarizes the poor state of affairs these two firms find themselves in today.

So to those MT4 traders who are constantly on the move like Bedouin tribesmen in search of a broker, be sure not to pitch your tents with either of these two dealers. Bedouins are supposed to be adept at spotting mirages, and FX Open and Poltek FX are merely mirages of legitimate forex dealers.